REG - MyCelx Tech. Corp. MyCelx Tech. Cp-MYXR - Final Results for the Year Ending 31 December 2025
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RNS Number : 3201D MyCelx Technologies Corporation 07 May 2026
7 May 2026
MYCELX TECHNOLOGIES CORPORATION (AIM: MYX)
Final Results for the Year Ending 31 December 2025
MYCELX Technologies Corporation ("MYCELX" or the "Company"), the clean water
and clean air technology company, announces its audited results for the year
ended 31 December 2025.
Highlights
Financial
· Revenue of $11.7 million (2024: $4.9 million)
· Gross profit of $5.6 million (2024: $1.3 million)
· Gross profit margin increased to 48% (2024: 27%)
· EBITDA(1) of $0.7 million (2024: negative $2.2 million)
· Profit before tax of $0.3 million (2024: loss before tax $2.6
million)
· Cash & cash equivalents of $0.9 million (2024: $1.3 million)
Operational
Produced Water
· Awarded a $3.9 million produced water treatment project in the U.S.
Permian Basin, the most active and productive oil region in the world.
· Successfully completed an onshore trial in the U.S. Permian Basin
with a large oil producer which included both the MYCELX coalescer and REGEN
equipment.
· Commenced offshore equipment lease in the Gulf of Mexico with global
integrated oil producer managing overboard excursions.
· Presented a case study with Petroleum Development Oman ('PDO') on
MYCELX's installation of its first REGEN Retrofit Package at a PDO site to the
Middle East Produced Water Oilfield Symposium and Exhibition in Qatar.
PFAS Remediation
· Awarded a rental contract for a mobile PFAS treatment system to treat
groundwater contamination at a site in North Dakota for the U.S. Department of
Defense.
· Commenced participation in a multiple technology pilot trial treating
PFAS contamination at a municipal wastewater treatment facility.
· Continued landfill leachate trial with pre-treatment system installed
for PFAS remediation.
Corporate
· Appointed Gareth Kaminski-Cook as Chairman of the Board of Directors.
· Elevated Matthew Goysich, Director of Engineering, to Executive Vice
President and Jim Weidler to Executive Vice President of Business Development.
Hired a Sales Lead in the Permian Basin responsible for scaling MYCELX's brand
and increasing sales.
· Opened a $500,000 line of credit ('LOC') which will increase funds
available for sales and marketing, trial equipment, and bridging project
accounts receivable as the Company expands and accelerates its reach to meet
the growing demand for its technology in Produced Water treatment and PFAS
remediation.
Outlook
MYCELX enters 2026 with positive momentum, a growing enquiry pipeline and an
increasingly focused commercial strategy centred on Produced Water treatment,
where demand continues to rise as operators seek lower-cost, more reliable
water management solutions. Building on recent project awards, successful
trials and long-standing customer relationships, the Board believes the
Company is well positioned to expand its presence in the Permian Basin and
Gulf of Mexico markets. The Middle East also remains a focus market, but the
Company believes it is too early to gauge the impact the current conflict
could have on our business in 2026. In parallel, MYCELX will continue to
pursue selective opportunities in PFAS remediation and Water Services, while
maintaining financial discipline and leveraging its proprietary technology
platform to drive sustainable growth and enhance shareholder value.
Connie Mixon, CEO, commented:
"2025 was a transformational year for MYCELX as we delivered strong revenue
growth, returned to profitability and made meaningful commercial progress
across our core markets. Our results reflect the benefits of the strategic
actions taken over the past two years to streamline the business, sharpen our
market focus and concentrate resources on the highest-value opportunities for
our proprietary technologies.
We are seeing increasing demand for advanced Produced Water treatment
solutions, particularly in the Permian Basin, Gulf of Mexico and Middle East,
where operators are under growing pressure to reduce costs, improve water
quality and oil recovery, and meet stricter environmental standards. Recent
project awards, successful trials, and critical hires give us confidence that
MYCELX is well positioned for further growth.
As we enter 2026, we remain focused on converting our pipeline of
opportunities, scaling recurring revenue streams and maintaining financial
discipline. With an experienced team, differentiated technology and clear
strategic direction, we believe MYCELX is entering an exciting new phase of
sustainable growth and value creation."
For further information, please contact:
MYCELX Technologies Corporation
Connie Mixon, CEO Tel: +1 888 306 6843
Kim Slayton, CFO
Cavendish Capital Markets Limited (Nominated Adviser and Sole Broker)
Giles Balleny / Callum Davidson / Elysia Bough (Corporate Finance) Tel: +44 20 7220 0500
Harriet Ward (Corporate Broking)
Jasper Berry / Michael Johnson (Sales)
(1) EBITDA is a non-U.S. GAAP measure that the Company uses to measure and
monitor performance and liquidity and is calculated as net profit before
interest expense, provision for income taxes, and depreciation and
amortisation of fixed and intangible assets, including depreciation of leased
equipment which is included in cost of goods sold. This non-U.S. GAAP measure
may not be directly comparable to other similarly titled measures used by
other companies and may have limited use as an analytical tool.
Chairman's Statement
2025 marked an important year in MYCELX's development as the Company
transitioned from a period of strategic restructuring to one focused on
commercial execution and growth. Over the past two years we have taken
decisive steps to streamline the organisation, sharpen our market focus, and
strengthen and concentrate our commercial resources on the areas where our
proprietary technology can deliver the greatest value.
These actions have led to improved financial performance. For FY2025, the
Company recognised revenue of approximately $11.7 million, representing 140
percent growth compared to FY2024. The Company also achieved a positive EBITDA
of $0.7 million and profit before tax of $0.3 million, exceeding market
expectations and surpassing the previous year's figures by $3 million and $3
million, respectively.
This performance reflects disciplined cost management, operational leverage,
and increasing contributions from higher-margin revenue across our core
markets.
Strategic focus on Produced Water treatment
The Board believes that MYCELX's greatest opportunity lies in the global
Produced Water treatment market, particularly in the United States Permian
Basin, the Gulf of Mexico, and applications associated with Enhanced Oil
Recovery ('EOR').
Produced Water is a rapidly growing challenge for the oil industry. As
reservoirs mature, increasing volumes of water must be managed during
production. In major producing regions such as the Permian Basin, water-to-oil
ratios already exceed five barrels of water for every barrel of oil produced
and are expected to continue rising significantly over the coming decades.
This "water tsunami" is forcing operators to rethink traditional water
disposal approaches. Increasing regulatory scrutiny of disposal wells,
seismicity concerns, and new regulatory frameworks supporting water reuse are
creating strong demand for technologies capable of treating produced water
efficiently and economically.
MYCELX's patented technology platform, including our REGEN media and MAC
coalescer system, is specifically designed to address these challenges by
improving oil recovery while enabling the treatment of produced water for
reuse, discharge or beneficial application.
Commercial progress in Produced Water markets
During the year the Company made encouraging progress across several key
Produced Water opportunities.
In the Permian Basin, the most active oil producing region in the world,
MYCELX was awarded a $3.9 million Produced Water treatment project by a major
midstream operator providing water management services to leading oil
producers. This project represents an important step in expanding the
Company's presence in the U.S. onshore market and demonstrates growing
industry recognition of the performance advantages of MYCELX's technology.
In addition, successful trials with oil producers have confirmed the ability
of the MYCELX two-stage system to recover more than 99% of oil from produced
water while delivering high-quality treated water suitable for reuse. These
results illustrate the economic benefits that our systems can deliver to
operators by both improving oil recovery and reducing water management costs.
The Company has been successfully treating produced water during offshore oil
production in the Gulf of Mexico for over 15 years, ensuring the operator is
reliably able to discharge water overboard that meets and exceeds regulatory
standards. This sector has experienced increased production activity in recent
years which has led to additional high margin lease and filter sales for
MYCELX.
Enhanced Oil Recovery opportunities
The Company continues to see significant opportunities in Enhanced Oil
Recovery ('EOR') operations, particularly in the Middle East where EOR
techniques are increasingly used to maintain production from mature
reservoirs.
Traditional water treatment systems in these environments are often unable to
manage chemically complex produced water streams. MYCELX's REGEN media and
patented retrofit solutions allow operators to upgrade existing filtration
systems and improve water treatment performance without requiring costly new
infrastructure. The result is reliable production with minimal downtime and
well integrity maintenance.
The Company has received a strong endorsement from a major EOR producer in the
Middle East in recognition of the advantages of REGEN in achieving their
production goals while using less water. The Board believes that this
technology will play an increasingly important role in enabling efficient
water management for EOR production globally.
PFAS remediation
PFAS contaminated water is recognised as a global threat to human health but
has only in the last several years been brought to the attention of the public
through heightened media exposure. In the U.S., the EPA has extended the
timelines to comply with the mandated EPA remediation requirements to 2029,
but recently announced certain regulations may go into effect sooner. The
Company continues to view this market as a strategic focus. While resource
allocation has been reduced, we will continue to engage with customers and
innovate to ensure our technology is preeminent when decisions are made to
comply with regulation enforcement.
Leadership transition and governance
In September 2025 the Company welcomed Gareth Kaminski-Cook as Chairman of the
Board, succeeding Tom Lamb who remains a Non-Executive Director. Gareth brings
extensive experience leading industrial and technology companies and will help
guide the Company through the next phase of growth. In recognition of
outstanding leadership and demonstrated commitment, the Company elevated
Matthew Goysich to Executive Vice President of Engineering and Jim Weidler to
Executive Vice President of Business Development.
The Board remains committed to maintaining strong governance while supporting
management in executing the Company's strategy.
Outlook
MYCELX enters 2026 with a clear strategic focus and a dedicated commercial
team, which is creating a fast-growing enquiry pipeline and positive momentum.
Demand for efficient water treatment solutions across the oil industry
continues to grow as operators seek to reduce costs, recover additional oil
and comply with increasingly stringent environmental regulations.
With its patented technologies, growing customer relationships and expanding
opportunity pipeline, the Board believes MYCELX is well positioned to capture
a meaningful share of the Produced Water treatment market while continuing to
explore emerging opportunities in PFAS Remediation and Water Services.
On behalf of the Board, I would like to thank our employees for their
commitment and hard work during the year, and our shareholders for their
continued support.
Chief Executive Officer's Statement
2025 was a year of meaningful progress for MYCELX as we advanced our strategy
to establish the Company as a leading provider of advanced water treatment
solutions for the global oil and gas industry.
Our focus remains clear: to deploy our proprietary technologies in
applications where traditional systems struggle to manage complex water
streams and where our solutions can deliver both economic and environmental
benefits.
Financial progress and operational momentum
During the year, MYCELX achieved an important milestone by delivering
profitability for FY2025, with revenue of $11.7 million, a significant
improvement compared with the prior year.
This performance reflects the progress we have made in commercialising our
technology and the benefits of the streamlined organisational structure
established following the sale of our Saudi Arabia operations.
Our focus on higher-margin activities, including recurring media sales,
project deployments and technology trials, continues to strengthen the
Company's financial profile.
Produced Water: a growing global challenge
The oil industry is facing an increasingly urgent challenge in managing
Produced Water. In the Permian Basin alone, water production volumes are
already substantial and are expected to grow significantly as production
increases and reservoirs mature. Disposal wells - historically the primary
method of managing produced water - are facing capacity limits and regulatory
scrutiny, creating strong demand for technologies that enable water reuse and
recycling. In the Middle East, the Enhanced oil Recovery ('EOR') method of oil
production that allows efficient recovery of oil from aged wells is driving
operators to advanced water treatment solutions replacing failing traditional
water treatment systems.
MYCELX's technology platform is uniquely positioned to address these
challenges.
Our proprietary MAC coalescer and REGEN media systems enable operators to
recover additional oil while producing treated water suitable for reuse in
production processes or beneficial applications such as irrigation and
industrial uses.
Expanding presence in the Permian Basin and Gulf of Mexico
The Permian Basin represents one of the most significant growth opportunities
for MYCELX.
During the year, we were awarded a $3.9 million Produced Water treatment
project by a major midstream operator serving large producers in the Permian
Basin.
In addition, trials conducted with leading producers demonstrated the ability
of our systems to deliver superior oil recovery and treated water quality
compared with traditional technologies. These results have generated
significant interest from operators seeking to reduce water management costs
while improving production economics.
The Company has operated in offshore Gulf of Mexico for over 12 years
protecting operators by ensuring overboard discharge of produced water is
always in compliance with Federal BSEE regulations. We expect to increase our
lease business with existing customers who require more advanced water
treatment and are references to other producers.
To support our expansion in the U.S., we have also strengthened our industry
relationships and advisory capabilities, positioning the Company to pursue
additional projects across the Permian Basin and other onshore regions as well
as offshore Gulf of Mexico.
Enhanced Oil Recovery opportunities
In parallel, we continue to see strong demand for our REGEN technology in
Enhanced Oil Recovery ('EOR') applications in the Middle East market.
As oil fields mature, EOR production techniques require increasing volumes of
water, which in turn creates complex treatment challenges. REGEN media enables
operators to treat chemically complex produced water streams more effectively
and efficiently than traditional filtration systems, improving throughput and
providing better reinjection water quality while saving water.
Industry validation of REGEN's performance continues to strengthen with a
major operator endorsement. We believe that retrofit opportunities in existing
facilities represent a substantial market opportunity that will add to
high-margin filter revenue over the coming years.
PFAS Remediation and Water Services
While Produced Water remains our primary focus, MYCELX also continues to make
progress in the emerging PFAS remediation and Water Services market.
During the year, we leased a mobile PFAS treatment system to a U.S. Department
of Defense site, addressing groundwater contamination associated with
firefighting foam. Projects such as this provide valuable validation of our
technology and position the Company to participate in what is expected to be a
long-term global remediation effort.
Looking ahead
We enter 2026 with increasing commercial traction and a strong pipeline of
opportunities across our core markets.
The global oil industry is undergoing a structural shift in how produced water
is managed to ensure reliable production for years to come. U.S. operators are
increasingly focused on recycling and beneficial reuse rather than disposal,
and this transition is creating significant opportunities for advanced water
treatment technologies that can provide solutions that deliver better water at
lower cost.
MYCELX is well positioned to play an important role in this transition.
With a growing installed base with major operators and water midstream
companies, we believe the Company is entering a period of accelerating
adoption and sustainable growth.
I would like to thank our employees for their dedication, our customers and
partners for their continued collaboration, and our shareholders for their
support as we work to deliver proprietary technology that is proven at scale.
Financial Review
Driven by revenue from the Nigeria REGEN and Middle East EOR projects, total
revenue increased 140% to $11.7 million for 2025, compared to $4.9 million for
2024. Revenue from equipment sales and leases increased 1400% to $7.5 million
for 2025 (FY24: $0.5 million) and revenue from consumable filtration media and
service decreased 5% to $4.2 million (FY24: $4.4 million). Whilst the
equipment sales are one-off by nature, there is longevity to the media sales
and ongoing lease and service revenues.
Gross profit increased by 331% to $5.6 million during the year, compared to
$1.3 million in 2024, and gross profit margin increased to 48% (FY24: 27%) due
to higher margins on equipment sales and service revenue.
Total operating expenses for 2025, including depreciation and amortisation,
decreased by 8% to $5.4 million (FY24: $5.9 million). The largest component of
operating expenses was selling, general and administrative expenses, which
decreased by approximately 9% to $5.0 million (FY24: $5.5 million) due to the
elimination of overhead expenses associated with the branch office in Saudi
Arabia. Depreciation and amortisation within operating expenses were
relatively unchanged at $0.2 million (FY24: $0.2 million).
EBITDA was $0.7 million, compared to negative $2.2 million in 2024. EBITDA is
a non-U.S. GAAP measure that the Company uses to measure and monitor
performance and liquidity and is calculated as net profit before interest
expense, provision for income taxes, and depreciation and amortisation of
fixed and intangible assets, including depreciation of leased equipment which
is included in cost of goods sold, and includes gains on sale of fixed assets
(which includes gains from the sale of Saudi Arabia branch assets - see Note
13). This non-U.S. GAAP measure may not be directly comparable to other
similarly titled measures used by other companies and may have limited use as
an analytical tool.
The Company recorded a profit before tax of $0.3 million in 2025, compared to
a loss before tax of $2.6 million in 2024. Basic profit per share was 1 cent
in 2025, compared to basic loss per share of 12 cents in the previous year.
As of 31 December 2025, total assets were $8.7 million with the largest assets
being accounts receivable of $3.2 million, $2.2 million of inventory, $1.0
million of property and equipment, and $0.9 of cash and cash equivalents
including restricted cash.
Total liabilities as of 31 December 2025 were $3.0 million and stockholders'
equity was $5.7 million. Total liabilities include a $0.5 million advance on
a line of credit and $0.5 million of deferred revenue related to milestone
payments on projects expected to be delivered in 2026.
The Company ended the period with $0.9 million of cash and cash equivalents,
including restricted cash, compared to $1.3 million in total at 31 December
2024. The Company used approximately $0.9 million of cash in operations in
2025 (FY24: $2.2 million used in operations). The Company used $0.04 million
in investment activities in 2025, compared to $2.2 million generated in the
first half of 2024 from proceeds from the sale of the Saudi branch assets.
Financing activities included a $0.5 million advance against a line of credit
in 2025 (FY24: $0.8 million).
In August 2025, the Company opened a line of credit ('LOC') which allows the
Company to access up to $0.5 million, as and when required. The proceeds will
enable MYCELX to increase funds available for sales and marketing, trial
equipment and bridging project accounts receivable as the Company expands and
accelerates its reach to meet the growing demand for its technology in
Produced Water treatment and PFAS remediation. The LOC has a floating rate
based on the Adjusted One Month Term of the Secured Overnight Financing Rate
plus 1.5% margin and is personally guaranteed by MYCELX's Chief Executive
Officer.
Statements of Operations
(USD, in thousands, except share data)
For the Year Ended 31 December: 2025 2024
Revenue 11,742 4,903
Cost of goods sold 6,126 3,559
Gross profit 5,616 1,344
Operating expenses:
Research and development 203 219
Selling, general and administrative 5,007 5,466
Depreciation and amortisation 213 212
Total operating expenses 5,423 5,897
Operating income (loss) 193 (4,553)
Other income (expense)
Interest expense (15) (13)
Gain on sale of property and equipment 159 1,928
Profit (loss) before income taxes 337 (2,638)
Provision for income taxes (3) (85)
Net profit (loss) 334 (2,723)
Profit (loss) per share - basic 0.01 (0.12)
Profit (loss) per share - diluted 0.01 (0.12)
Shares used to compute basic profit (loss) per share 24,363,814 23,429,416
Shares used to compute diluted profit (loss) per share 25,816,965 23,429,416
The accompanying notes are an integral part of the financial statements.
Balance Sheets
(USD, in thousands, except share data)
As at 31 December: 2025 2024
Assets
Current Assets
Cash and cash equivalents 812 1,260
Restricted cash 50 50
Accounts receivable - net 3,183 558
Unbilled accounts receivable - 1,206
Inventory 2,247 4,002
Prepaid expenses and other assets 83 106
Total Current Assets 6,375 7,182
Property and equipment - net 1,034 955
Intangible assets - net 493 704
Operating lease asset - net 767 1,208
Total Assets 8,669 10,049
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable 843 274
Payroll and accrued expenses 435 178
Contract liabilities 456 2,913
Customer deposits 15 164
Line of credit 450 -
Operating lease obligations - current 399 380
Total Current Liabilities 2,598 3,909
Operating lease obligations - long-term 412 877
Total Liabilities 3,010 4,786
Stockholders' Equity
Common stock, $0.025 par value, 100,000,000 shares authorised, 24,363,814 609 609
shares issued and outstanding at 31 December 2025 and 2024
Additional paid-in capital 45,655 45,593
Accumulated deficit (40,605) (40,939)
Total Stockholders' Equity 5,659 5,263
Total Liabilities and Stockholders' Equity 8,669 10,049
The accompanying notes are an integral part of the financial statements.
Statements of Stockholders' Equity
(USD, in thousands, except share data)
Common Stock Additional Paid-in Capital Accumulated Deficit Total
$ $ $
Shares $
Balances at 31 December 2023 22,983,023 574 44,799 (38,216) 7,157
Issuance of common stock, net of offering costs 1,380,791 35 757 - 792
Stock-based compensation expense - - 37 - 37
Net loss for the period - - - (2,723) (2,723)
Balances at 31 December 2024 24,363,814 609 45,593 (40,939) 5,263
Stock-based compensation expense - - 62 - 62
Net profit for the period - - - 334 334
Balances at 31 December 2025 24,363,814 609 45,655 (40,605) 5.659
The accompanying notes are an integral part of the financial statements.
Statements of Cash Flows
(USD, in thousands)
For the Year Ended 31 December: 2025 2024
Cash flows from operating activities
Net profit (loss) 334 (2,723)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortisation 315 398
Amortisation of right of use asset 441 (363)
Gain on sale of property and equipment (159) (1,928)
Loss on abandonment or expiration of patent 140 -
Inventory reserve adjustment (426) (525)
Stock compensation 62 37
Change in operating assets and liabilities:
Accounts receivable - net (2,625) 1,254
Unbilled accounts receivable 1,206 139
Inventory 2,052 (163)
Prepaid expenses and other assets 23 170
Operating liabilities (446) 368
Accounts payable 569 (1,267)
Payroll and accrued expenses 257 (615)
Contract liability (2,457) 2,913
Customer deposits (149) 154
Net cash used in operating activities (863) (2,151)
Cash flows from investing activities
Payments for purchases of property and equipment (35) (32)
Proceeds from sale of property and equipment - 2,281
Payments for internally developed patents - (13)
Net cash (used in) provided by investing activities (35) 2,236
Cash flows from financing activities
Net proceeds from stock issuance - 792
Advances on line of credit 450 -
Net cash provided by financing activities 450 792
Net (decrease) increase in cash, cash equivalents and restricted cash (448) 877
Cash, cash equivalents and restricted cash, beginning of year 1,310 433
Cash, cash equivalents and restricted cash, end of year 862 1,310
Supplemental disclosures of cash flow information:
Cash payments for interest 14 13
Cash payments for income taxes 3 156
Non-cash movements of inventory and fixed assets 288 103
The accompanying notes are an integral part of the financial statements.
Notes to the Financial Statements
1. Nature of Business and Basis of Presentation
Basis of presentation - These annual financial statements have been prepared
using recognition and measurement principles of Generally Accepted Accounting
Principles in the United States of America ('U.S. GAAP').
Nature of business - MYCELX Technologies Corporation ('MYCELX' or the
'Company') was incorporated in the State of Georgia on 24 March 1994. The
Company is headquartered in Norcross, Georgia with operations in Houston,
Texas and the United Kingdom. The Company provides clean water technology
equipment and related services to the oil and gas, power, marine and heavy
manufacturing sectors and the majority of its revenue is derived from the
United States.
2. Summary of Significant Accounting Policies
Use of estimates - The preparation of financial statements in conformity with
U.S. GAAP requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the amounts reported in
the financial statements and accompanying notes. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised. The
primary estimates and assumptions made by management relate to the inventory
valuation, accounts receivable valuation, useful lives of property and
equipment, volatility used in the valuation of the Company's share-based
compensation and the valuation allowance on deferred tax assets. Although
these estimates are based on management's best knowledge of current events and
actions the Company may undertake in the future, actual results ultimately may
differ from the estimates and the differences may be material to the financial
statements.
Revenue recognition - The Company's revenue consists of sales of filtration
media product, equipment leases, professional services to operate the leased
assets, turnkey operations and equipment sales. The Company recognises revenue
in accordance with ASC 606, Revenue from Contracts with Customers, for
consumable filtration media, equipment sales and services. Revenue from
equipment leases is accounted for under ASC 842, Leases. These sales are based
on mutually agreed upon pricing with the customer prior to the delivery of the
media product and equipment. The Company recognises revenue when it satisfies
a performance obligation by transferring control over a product or service to
a customer.
Revenue from filtration media sales and spare parts (part of equipment sales)
is billed and recognised when products are shipped to the customer. Revenue
from equipment leases is recognised over time as the equipment is available
for customer use and is typically billed monthly. Revenue from professional
services provided to monitor and operate the equipment is recognised over time
when the service is provided and is typically billed monthly. Revenue from
turnkey projects whereby the Company is asked to manage the water filtration
process end to end is recognised on a straight-line basis over time as the
performance obligation, in the context of the contract, is a stand-ready
obligation to filter all water provided. Revenue from contracts related to
construction of equipment is recognised upon either factory acceptance testing
or shipment of the equipment to the customer because the control transfers at
acceptance or the point of shipment and there is no enforceable right to
payments made as customer deposits prior to that date. Customer deposits for
equipment sales represent payments made prior to transferring control at the
point of shipment that can be refunded at any time when requested by the
customer. Contract liabilities represent milestone payments on large equipment
sales.
Sales tax charged to customers is presented on a net basis within the
Statements of Operations and therefore recorded as a reduction of net
revenues. Shipping and handling costs associated with outbound freight after
control over a product has transferred to a customer are accounted for as a
fulfilment cost and are included in cost of goods sold.
The Company's contracts with the customers state the final terms of the sales,
including the description, quantity, and price of media product, equipment
(sale or lease) and the associated services to be provided. The Company's
contracts are generally short-term in nature, and in most situations the
Company provides products and services ahead of payment and has fulfilled the
performance obligation prior to billing.
The Company believes the output method is a reasonable measure of progress for
the satisfaction of its performance obligations that are satisfied over time,
as it provides a faithful depiction of (1) performance toward complete
satisfaction of the performance obligation under the contract and (2) the
value transferred to the customer of the services performed under the
contract. All other performance obligations are satisfied at a point in time
upon transfer of control to the customer.
The Company's contracts with customers often include promises to transfer
multiple products and services. Determining whether products and services are
considered distinct performance obligations that should be accounted for
separately versus together may require significant judgement. Judgement is
required to determine stand-alone selling price ('SSP') for each distinct
performance obligation. The Company develops observable SSP by reference to
stand-alone sales for identical or similar items to similarly situated
customers at prices within a sufficiently narrow range.
All equipment sold by the Company is covered by the original manufacturer's
warranty. The Company does not offer an additional warranty and has no related
obligations.
Unbilled accounts receivable represents revenue recognised in excess of
amounts billed. Contract liability represents billings in excess of revenue
recognised. Unbilled accounts receivable at 31 December 2025 and 2024, and 1
January 2024 was $nil, $1.2 million and $255,000, respectively. Contract
liability at 31 December 2025 and 2024, and 1 January 2024 was $456,000, $2.9
million and $nil, respectively.
Timing of revenue recognition for each of the periods and geographic regions
presented is shown below:
Year Ending 31 December Equipment Leases, Turnkey Arrangements, and Services Recognised Over Time Consumable Filtration Media, Equipment Sales and Services Recognised at a
Point in Time
(USD, in thousands)
2025 2024 2025 2024
Nigeria - - 6,569 -
Middle East - 871 1,401 954
United States of America - 141 2,448 1,664
Australia - - 280 772
Other - - 835 430
Total revenue recognised under ASC 606 - 1,012 11,533 3,820
Total revenue recognised under ASC 842 209 71 - -
Total revenue 209 1,083 11,533 3,820
Contract costs - The Company capitalises certain contract costs such as costs
to obtain contracts (direct sales commissions) and costs to fulfil contracts
(upfront costs where the Company does not identify the set-up fees as a
performance obligation). These contract assets are amortised over the period
of benefit, which the Company has determined is customer life and averages one
year.
During the years ended 31 December 2025 and 2024, the Company did not have any
costs to obtain a contract and any costs to fulfil a contract were
inconsequential.
Cash, cash equivalents and restricted cash - Cash and cash equivalents consist
of short-term, highly liquid investments which are readily convertible into
cash within ninety days of purchase. At 31 December 2025, all of the Company's
cash, cash equivalent and restricted cash balances were held in checking and
money market accounts. The Company maintains its cash in bank deposit accounts
which, at times, may exceed federally insured limits. At 31 December 2025 and
2024, cash in non-U.S. institutions was $nil and $1,000, respectively. The
Company has not experienced any losses in such accounts. The Company
classifies as restricted cash all cash whose use is limited by contractual
provisions. At 31 December 2025 and 2024, restricted cash included $50,000 in
a money market account to secure the Company's corporate credit card.
Reconciliation of cash, cash equivalents and restricted cash at 31 December
2025 and 2024:
31 December 2025 31 December 2024
US$000 US$000
Cash and cash equivalents 812 1,260
Restricted cash 50 50
Total cash, cash equivalents and restricted cash 862 1,310
Accounts receivable - Trade accounts receivable are stated at the amount
management expects to collect from outstanding balances. The Company provides
credit in the normal course of business to its customers and performs ongoing
credit evaluations of those customers and maintains allowances for doubtful
accounts, as necessary. Accounts are considered past due based on the
contractual terms of the transaction. Credit losses, when realised, have been
within the range of the Company's expectations and, historically, have not
been significant. The Company measures its credit losses using a current
expected credit loss model. The measurement of expected credit losses is based
on relevant information about past events, including historical experience,
current conditions and reasonable and supportable forecasts that affect the
collectability of the reported amounts. The allowance for credit losses
represents the Company's best estimate of probable future losses in the
accounts receivable balance, primarily based on known troubled accounts,
historical experience and other currently available evidence. Accounts
receivable are written off against the allowance when the Company believes
that the receivable will not be recovered. The allowance for doubtful accounts
at 31 December 2025 and 2024 was $nil and $83,000, respectively.
Inventories - Inventories consist primarily of raw materials and filter media
finished goods as well as equipment to house the filter media and are stated
at the lower of cost or net realisable value. Equipment that is in the process
of being constructed for sale or lease to customers is also included in
inventory (work-in-progress). The Company applies the Average Cost method to
account for its inventory. Manufacturing work-in-progress and finished
products inventory include all direct costs, such as labour and materials, and
those indirect costs which are related to production, such as indirect labour,
rents, supplies, repairs and depreciation costs. A valuation reserve is
recorded for slow-moving or obsolete inventory items to reduce the cost of
inventory to its net realisable value. The Company determines the valuation by
evaluating expected future usage as compared to its past history of
utilisation and future expectations of usage. The inventory reserve at 31
December 2025 and 2024 was $249,000 and $675,000, respectively. Changes to the
inventory reserve are included in cost of goods sold. At 31 December 2025 and
2024, the Company had REGEN-related inventory of 53 percent and 32 percent of
the total inventory balance, respectively, which is in excess of the Company's
current requirements based on the recent level of sales. The inventory is
associated with efforts to expand into the Enhanced Oil Recovery and
Beneficial Reuse markets that the Company has identified as large global
markets.
Prepaid expenses and other current assets - Prepaid expenses and other current
assets include non-trade receivables that are collectible in less than 12
months, security deposits on leased space and various prepaid amounts that
will be charged to expenses within 12 months. Non-trade receivables that are
collectible in 12 months or more are included in long-term assets.
Property and equipment - All property and equipment are valued at cost.
Depreciation is computed using the straight-line method for reporting over the
following useful lives:
Leasehold improvements Lease period or 1-5 years (whichever is shorter)
Office equipment 3-10 years
Manufacturing equipment 5-15 years
Research and development equipment 5-10 years
Purchased software Licensing period or 5 years (whichever is shorter)
Equipment leased to customers 5-10 years
Expenditures for major renewals and betterments that extend the useful lives
of property and equipment are capitalised. Expenditures for maintenance and
repairs are charged to expense as incurred. Depreciation expense includes
depreciation on equipment leased to customers and is included in cost of goods
sold.
Intangible assets - Intangible assets consist of the costs incurred to
purchase patent rights and legal and registration costs incurred to internally
develop patents. Intangible assets are reported net of accumulated
amortisation. Patents are amortised using the straight-line method over a
period based on their contractual lives which approximates their estimated
useful lives.
Impairment of long-lived assets - Long-lived assets to be held and used,
including property and equipment and intangible assets with definite useful
lives, are assessed for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. If the
total of the expected undiscounted future cash flows is less than the carrying
amount of the asset, a loss, if any, is recognised for the difference between
the fair value and carrying value of the assets. Impairment analyses, when
performed, are based on the Company's business and technology strategy,
management's views of growth rates for the Company's business, anticipated
future economic and regulatory conditions, and expected technological
availability. For purposes of recognition and measurement, the Company groups
its long-lived assets at the lowest level for which there are identifiable
cash flows, which are largely independent of the cash flows of other assets
and liabilities. No impairment charges were recorded in the years ended 31
December 2025 and 2024.
Research and development costs - Research and development costs are expensed
as incurred. Research and development expense for the years ended 31 December
2025 and 2024 was approximately $203,000 and $219,000, respectively.
Advertising costs - The Company expenses advertising costs as incurred.
Advertising expense for the years ended 31 December 2025 and 2024 was $46,000
and $31,000, respectively, and is recorded in selling, general and
administrative expenses.
Income taxes - The provision for income taxes for annual periods is determined
using the asset and liability method, under which deferred tax assets and
liabilities are calculated based on the temporary differences between the
financial statement carrying amounts and income tax bases of assets and
liabilities using currently enacted tax rates. The deferred tax assets are
recorded net of a valuation allowance when, based on the weight of available
evidence, it is more likely than not that some portion or all of the recorded
deferred tax assets will not be realised in future periods. Decreases to the
valuation allowance are recorded as reductions to the provision for income
taxes and increases to the valuation allowance result in additional provision
for income taxes. The realisation of the deferred tax assets, net of a
valuation allowance, is primarily dependent on the ability to generate taxable
income. A change in the Company's estimate of future taxable income may
require an addition or reduction to the valuation allowance.
The benefit from an uncertain income tax position is not recognised if it has
less than a 50 percent likelihood of being sustained upon audit by the
relevant authority. For positions that are more than 50 percent likely to be
sustained, the benefit is recognised at the largest amount that is
more-likely-than-not to be sustained. Where a net operating loss carried
forward, a similar tax loss or a tax credit carry forward exists, an
unrecognised tax benefit is presented as a reduction to a deferred tax asset.
Otherwise, the Company classifies its obligations for uncertain tax positions
as other non-current liabilities unless expected to be paid within one year.
Liabilities expected to be paid within one year are included in the accrued
expenses account.
The Company recognises interest accrued related to tax in interest expense and
penalties in selling, general and administrative expenses. During the years
ended 31 December 2025 and 2024 the Company recognised no interest
or penalties.
Earnings per share - Basic earnings per share is computed using the weighted
average number of common shares outstanding during the period. Diluted
earnings per share is computed using the weighted average number of common and
potentially dilutive shares outstanding during the period. Potentially
dilutive shares consist of the incremental common shares issuable upon
conversion of the exercise of common stock options. Potentially dilutive
shares are excluded from the computation if their effect is anti-dilutive.
There were no common stock equivalents consisting of unexercised stock options
that were excluded from computing diluted net loss per share for the year
ended 31 December 2025 and there were no adjustments to net income available
to stockholders as recorded on the Statement of Operations.
The following table sets forth the components used in the computation of basic
and diluted net (loss) profit per share for the periods indicated:
Years Ended 31 December
2025 2024
Basic weighted average outstanding shares of common stock 24,363,814 23,429,416
Effect of potentially dilutive stock options 1,453,151 -
Diluted weighted average outstanding shares of common stock 25,816,965 23,429,416
Anti-dilutive shares of common stock excluded from diluted weighted average - 1,478,718
shares of common stock
Fair value of financial instruments - The Company uses the framework in ASC
820, Fair Value Measurements, ('ASC 820') to determine the fair value of its
financial assets. ASC 820 establishes a fair value hierarchy that prioritises
the inputs to valuation techniques used to measure fair value and expands
financial statement disclosures about fair value measurements.
The hierarchy established by ASC 820 gives the highest priority to unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1
measurements) and the lowest priority to unobservable inputs
(Level 3 measurements).
The three levels of the fair value hierarchy under ASC 820 are described
below:
· Level 1: Unadjusted quoted prices in active markets for identical
assets or liabilities that the Company has the ability to access at the
measurement date.
· Level 2: Inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly or indirectly.
· Level 3: Unobservable inputs for the asset or liability.
There were no transfers into and out of each level of the fair value hierarchy
for assets measured at fair value for the years ended 31 December 2025 or
2024.
Transfers between Levels 1 and 2 generally relate to whether a market becomes
active or inactive. Transfers between Levels 2 and 3 generally relate to
whether significant relevant observable inputs are available for the fair
value measurement in their entirety.
The Company's financial instruments as of 31 December 2025 and 2024 include
cash and cash equivalents, restricted cash, accounts receivable and accounts
payable. The carrying values of cash and cash equivalents, restricted cash,
accounts receivable and accounts payable approximate fair value due to the
short-term nature of those assets and liabilities.
Foreign currency transactions - From time to time the Company transacts
business in foreign currencies (currencies other than the United States
Dollar). These transactions are recorded at the rates of exchange prevailing
on the dates of the transactions. Foreign currency transaction gains or losses
are included in selling, general and administrative expenses.
Stock compensation - The Company issues equity-settled share-based awards to
certain employees, which are measured at fair value at the date of grant. The
fair value determined at the grant date is expensed, based on the Company's
estimate of shares that will eventually vest, on a straight-line basis over
the vesting period. Fair value for the share awards representing equity
interests identical to those associated with shares traded in the open market
is determined using the market price at the date of grant. Fair value is
measured by use of the Black Scholes valuation model (see Note 10).
Recently issued accounting standards - In November 2023, the FASB issued ASU
2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment
Disclosures, to enhance disclosures about significant segment expenses. The
guidance is effective for fiscal years beginning after 15 December 2023. The
Company adopted the new accounting standard for the fiscal year 2024. The
adoption of this ASU did not have a material effect on the Company's financial
statements, other than the newly required disclosure for significant expense.
Refer to Note 12, Segment and Geographic Information.
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting
Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):
Disaggregation of Income Statement Expenses, to improve the disclosures by
requiring more detailed information about the types of expenses (including
purchases of inventory, employee compensation, depreciation and amortisation)
in commonly presented expense captions (such as cost of sales, SG&A, and
research and development). In January 2025, the FASB issued 2025-01, Income
Statement - Reporting Comprehensive Income - Expense Disaggregation
Disclosures (Subtopic 220-40), to modify the effective date previously stated
in ASU 2024-03 to clarify that all public business entities are required to
adopt the guidance in annual reporting periods beginning after 15 December
2026. Early adoption is permitted. We are currently evaluating the impact that
adopting ASU 2024-03 would have on our financial statements and will adhere to
the clarified effective date in ASU 2025-01 if implementation is necessary.
Recent accounting pronouncements not discussed above are either not applicable
or are not expected to have a material impact on the Company.
3. Accounts Receivable
Accounts receivable and their respective allowance amounts at 31 December 2025
and 2024:
31 December 2025 31 December 2024
US$000 US$000
Accounts receivable 3,183 641
Less: allowance for doubtful accounts - (83)
Total receivable - net 3,183 558
4. Inventory
Inventories consist of the following at 31 December 2025 and 2024:
31 December 2025 31 December 2024
US$000 US$000
Raw materials 850 1,048
Work-in-progress 52 1,691
Finished goods 1,345 1,263
Total inventory 2,247 4,002
5. Property and Equipment
Property and equipment consist of the following at 31 December 2025 and 2024:
31 December 2025 31 December 2024
US$000 US$000
Leasehold improvements 530 530
Office equipment 616 616
Manufacturing equipment 709 709
Research and development equipment 427 427
Purchased software 207 207
Equipment leased to customers 2,132 1,809
4,621 4,298
Less: accumulated depreciation (3,587) (3,343)
Property and equipment - net 1,034 955
During the years ended 31 December 2025 and 2024, the Company removed property
and equipment and the associated gross and accumulated depreciation of
approximately $nil and $7.5 million, respectively, to reflect the disposal of
property and equipment.
Depreciation expense for the years ended 31 December 2025 and 2024 was
approximately $244,000 and $330,000, respectively, and includes depreciation
on equipment leased to customers. Depreciation expense on equipment leased to
customers included in cost of goods sold for the years ended 31 December 2025
and 2024 was $102,000 and $186,000, respectively.
6. Intangible Assets
During 2009, the Company entered into a patent rights purchase agreement. The
patent is amortised utilising the straight-line method over a useful life of
17 years which represents the legal life of the patent from inception.
Accumulated amortisation on the patent was approximately $96,000 and $89,000
as of 31 December 2025 and 2024, respectively.
In January 2023, the Company entered into a patent rights purchase agreement.
The patents are amortised utilising the straight-line method over useful lives
of 13 and 14.75 years which represent the remaining legal life of the patents
on the date of purchase. Accumulated amortisation on the patents was
approximately $11,000 and $7,000 at 31 December 2025 and 2024, respectively.
In addition to the purchased patents, the Company has internally developed
patents. Internally developed patents include legal and registration costs
incurred to obtain the respective patents. The Company currently holds various
patents and numerous pending patent applications in the United States, as well
as numerous foreign jurisdictions outside of the United States. In 2025,
there was no new expense for internally developed patents and fees on patents
in progress.
Intangible assets as of 31 December 2025 and 2024 consist of the following:
Weighted Average Useful Lives 31 December 2025 31 December 2024
US$000 US$000
Internally developed patents 15 years 1,389 1,529
Purchased patents 17 years 150 150
1,539 1,679
Less accumulated amortisation - (939) (879)
internally developed patents
Less accumulated amortisation - (107) (96)
purchased patents
Intangible assets - net 493 704
15
At 31 December 2025, internally developed patents include approximately
$34,000 for costs accumulated for patents that have not yet been issued and
are not amortised.
Approximate aggregate future amortisation expense is as follows:
Year Ending 31 December (USD, in thousands)
2026 68
2027 63
2028 56
2029 51
2030 44
Thereafter 178
Amortisation expense for the years ended 31 December 2025 and 2024 was
approximately $71,000 and $68,000, respectively.
7. Income Taxes
The components of income taxes shown in the Statements of Operations are as
follows:
31 December 2025 31 December 2024
US$000 US$000
Current:
Federal - -
Foreign - 81
State 3 4
Total current provision 3 85
Deferred:
Federal - -
Foreign - -
State - -
Total deferred provision - -
Total provision for income taxes 3 85
The provision for income tax varies from the amount computed by applying the
statutory corporate federal tax rate of 21 percent, primarily due to the
effect of certain non-deductible expenses, foreign withholding tax, and
changes in valuation allowances.
A reconciliation of the differences between the effective tax rate and the
federal statutory tax rate is as follows:
31 December 2025 31 December 2024
Federal statutory income tax rate 21.0% 21.0%
State tax rate, net of federal benefit 28.5% (1.0%)
Valuation allowance (47.7%) (14.0%)
Other (0.8%) (6.8%)
Foreign withholding tax - (2.4%)
Effective income tax rate 1.0% (3.2%)
The significant components of deferred income taxes included in the Balance
Sheets are as follows:
31 December 2025 31 December 2024
US$000 US$000
Deferred tax assets
Net operating loss 7,709 7,822
Equity compensation 132 119
Research and development credits 91 91
Right of use liability 176 274
Inventory valuation reserve 54 147
Other 9 53
Total gross deferred tax asset 8,171 8,506
Deferred tax liabilities
Property and equipment (245) (323)
Right of use asset (167) (263)
Total gross deferred tax liability (412) (586)
Net deferred tax asset before valuation allowance 7,759 7,920
Valuation allowance (7,759) (7,920)
Net deferred tax asset (liability) - -
Deferred tax assets and liabilities are recorded based on the difference
between an asset or liability's financial statement value and its tax
reporting value using enacted rates in effect for the year in which the
differences are expected to reverse, and for other temporary differences as
defined by ASC-740, Income Taxes. At 31 December 2025 and 2024, the Company
has recorded a valuation allowance of $7.8 million and $7.9 million,
respectively, a change of $161,000 and $370,000 for each year, for which it is
more likely than not that the Company will not receive future tax benefits due
to the uncertainty regarding the realisation of such deferred tax assets.
As of 31 December 2025, the Company has approximately $36.1 million of gross
U.S. federal net operating loss carry forwards and $2.0 million of gross state
net operating loss carry forwards that will begin to expire in the 2026 tax
year and will continue through 2044 when the current year net operating losses
will expire. As of 31 December 2024, the Company had approximately $36.2
million of gross U.S. federal net operating loss carry forwards and $3.3
million of gross state net operating loss carry forwards.
On 4 July 2025, the One Big Beautiful Bill Act ('OBBBA') was signed into law
in the U.S., which contains a broad range of tax provisions. The Company has
evaluated the provisions and does not expect the adoption or implementation of
OBBBA to have a material impact on its consolidated financial statements,
including its effective tax rate. The Company does not anticipate that OBBBA
will result in any additional tax credits, deductions, or other tax-related
differences. Accordingly, the Company does not expect OBBBA to have a material
impact on its overall tax position.
The Company's tax years 2021 through 2025 remain subject to examination by
federal, state and foreign income tax jurisdictions. However, net operating
losses that were generated in previous years may still be adjusted by the
Internal Revenue Service if they are used in a future period.
8. Line of Credit
In August 2025, the Company entered into a bank line of credit (TriState
Capital Bank) that allows for borrowings up to $500,000. The line of credit is
revolving and is payable on demand. The line of credit is secured by a
security interest in a brokerage account held by Connie Mixon, CEO and
Director. Borrowings bear interest at a rate per annum equal to (a) the Term
SOFR Reference Rate, a forward-looking term rate based on SOFR, for a period
of one month plus (b) the Term SOFR Adjustment, which is defined as a
percentage equal to 0.11448 percent per annum. 'SOFR' means a rate equal to
the secured overnight financing rate as administered by the Federal Reserve
Bank of New York. The balance on the line of credit at 31 December 2025 was
$450,000. The interest rate on 31 December 2025 was 5.3728 percent. Interest
expense related to this loan for the year ended 31 December 2025 was $4,600.
9. Stock Compensation
In July 2011, the Company's shareholders approved the Conversion Shares and
the Directors' Shares, as well as the Plan Shares and Omnibus Performance
Incentive Plan ('Plan'). This included the termination of all outstanding
stock incentive plans, cancellation of all outstanding stock incentive
agreements, and the awarding of stock incentives to Directors and certain
employees and consultants. The Company established the Plan to attract and
retain Directors, officers, employees and consultants. The Company reserved an
amount equal to 10 percent of the Common Shares issued and outstanding
immediately following its public offering.
Upon the issuance of these shares, an award of share options was made to the
Directors and certain employees and consultants, and a single award of
restricted shares was made to a former Chief Financial Officer. In addition,
additional stock options were awarded in each year subsequent. The awards of
stock options and restricted shares made upon issuance were in respect of 85
percent of the Common Shares available under the Plan, equivalent to 8.5
percent of the Public Offering.
In July 2019, the Company's shareholders approved the extension of the Plan to
2029 and the increase in the possible number of shares to be awarded pursuant
to the Plan to 15 percent of the Company's issued capital at the date of any
award. The total number of shares reserved for stock options under this Plan
is 3,654,572 with 1,495,000 shares allocated as of 31 December 2025. The
shares are all allocated to employees, executives and consultants.
Any options granted to Non-Executive Directors, unless otherwise agreed, vest
contingent on continuing service with the Company at the vesting date and
compliance with the covenants applicable to such service.
Employee options vest over three years with a third vesting rateably each
year, partially on issuance and partially over the following 24-month period,
or if there is a change of control, and expire on the tenth anniversary date
the option vests. Vesting accelerates in the event of a change of control.
Options granted to Non-Executive Directors, Consultants and one Executive vest
partially on issuance and will vest partially one to two years later. The
remaining Non-Executive Director options expired at the end of 2016 on the
five-year anniversary date of the grant.
As discussed in Note 2, the Company uses the Black Scholes valuation model to
measure the fair value of options granted. The Company's expected volatility
is calculated as the historical volatility of the Company's stock over a
period equal to the expected term of the awards. The expected terms of options
are calculated using the weighted average vesting period and the contractual
term of the options. The risk-free interest rate is based on a blended average
yield of two- and five-year United States Treasury Bills at the time of grant.
The assumptions used in the Black Scholes option pricing model for options
granted in 2025 and 2024 were as follows:
Number of Options Granted Grant Date Risk-free Interest Rate Expected Term Volatility Exercise Price Fair Value Per Option
2024 25,000 13/03/2024 3.97% 6.0 years 65.00% $0.64 $0.40
225,000 15/03/2024 3.97% 6.0 years 65.00% $0.59 $0.37
50,000 15/03/2024 3.97% 5.75 years 65.00% $0.59 $0.36
2025 200,000 09/04/2025 4.04% 5.75 years 62.00% $0.31 $0.19
The Company assumes a dividend yield of 0.0 percent.
The following table summarises the Company's stock option activity for the
years ended 31 December 2025 and 2024:
Stock Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Average Grant Date Fair Value
Outstanding at 31 December 2023 1,753,375 $1.12 5.8 $0.66
Granted 300,000 $0.59 6.0 $0.37
Forfeited (741,707) $1.53
Outstanding at 31 December 2024 1,311,668 $0.80 5.8 $0.50
Granted 200,000 $0.31 5.8 $0.37
Forfeited (16,668) $2.15
Outstanding at 31 December 2025 1,495,000 $0.65 5.8 $0.42
Exercisable at 31 December 2025 1,303,333 $0.68 5.5
The total intrinsic value of the stock options exercised during the years
ended 31 December 2025 and 2024 was approximately $nil.
A summary of the status of unvested options as of 31 December 2025 and changes
during the years ended 31 December 2025 and 2024 is presented below:
Unvested Options Shares Weighted-Average Fair Value at Grant Date
Unvested at 31 December 2023 341,667 $0.40
Granted 300,000 $0.37
Vested (108,333) $0.57
Forfeited (325,000)
Unvested at 31 December 2024 208,334 $0.37
Granted 200,000 $0.19
Vested (216,667)
Unvested at 31 December 2025 191,667 $0.28
As of 31 December 2025, total unrecognised compensation cost of approximately
$58,000 was related to unvested share-based compensation arrangements awarded
under the Plan which is expected to be recognised over the next two years.
Total stock compensation expense for the years ended 31 December 2025 and 2024
was approximately $62,000 and $37,000, respectively.
10. Commitments and Contingencies
Operating leases - As of 31 December 2025, the Operating Lease ROU Asset has a
balance of $767,000, net of accumulated amortisation of $1,053,000, and an
Operating Lease Liability of $811,000, which are included in the accompanying
balance sheet. The weighted-average discount rate used for leases is 5.25
percent, which is based on the Company's secured incremental borrowing rate.
The Company's lease arrangements are in relation to two property leases for
office and warehouse space. The Company's leases do not include any options to
renew that are reasonably certain to be exercised. The Company's leases mature
at various dates through May 2029 and have a weighted-average remaining life
of 2.7 years.
Future maturities under the Operating Lease Liability are as follows for the
years ended 31 December:
Year Ending 31 December Future Lease Payments
US$000
2026 432
2027 220
2028 151
2029 64
Total future maturities 867
Portion representing interest (56)
Total 811
Total lease expense for the years ended 31 December 2025 and 2024 was
approximately $411,000 and $412,000, respectively.
Total cash paid for leases for the years ended 31 December 2025 and 2024 was
$416,000 and $410,000, respectively, and is part of prepaid operating leases
on the Statements of Cash Flows.
The Company has elected to apply the short-term lease exception to all leases
of one year or less and is not separating lease and non-lease components when
evaluating leases. Total costs associated with short-term leases was $32,000
and $62,000 for the years ended 31 December 2025 and 2024, respectively.
Legal - From time to time, the Company is a party to certain legal proceedings
arising in the ordinary course of business. In the opinion of management,
there are no current legal proceedings or other claims outstanding which could
have a material adverse effect on the results of operations or financial
position of the Company.
11. Related Party Transactions
The Company has held a patent rights purchase agreement since 2009 with a
Director, who is also a shareholder, as described in Note 6 and has a bank
line of credit secured by Connie Mixon, CEO and Director, as described in Note
8.
12. Segment and Geographic Information
ASC 280-10, Disclosures About Segments of an Enterprise and Related
Information, ('ASC 280-10') establishes standards for reporting information
about operating segments. ASC 280-10 requires that the Company report
financial and descriptive information about its reportable operating segments.
Operating segments are components of an enterprise for which separate
financial information is available that is evaluated regularly by the chief
operating decision maker ('CODM') in deciding how to allocate resources and in
assessing performance. The Company's CODM is the Chief Executive Officer
('CEO'). While the CEO is apprised of a variety of financial metrics and
information, the business is principally managed on an aggregate basis as of
31 December 2025. The CODM, or CEO, uses net income to evaluate income
generated from the Company's assets (return on assets) in deciding whether to
reinvest profits into further business development activities or to pay
dividends. Net income is also used by the CEO to monitor overall budget versus
actual results. The CEO is regularly provided with only the consolidated
expenses as noted on the face of the income statement. For the year ended 31
December 2025, all of the Company's assets were in the United States of
America ('U.S.') and the Company's revenues were generated primarily in
Nigeria, the Middle East and the U.S.. Additionally, the majority of the
Company's expenditures and personnel either directly supported its efforts in
Nigeria, the Middle East and the U.S. or cannot be specifically attributed to
a geography. Therefore, the Company has only one reportable operating segment.
Revenue from customers by geography is as follows:
Year Ending 31 December (USD, in thousands) 2025 2024
Nigeria 6,569 -
United States of America 2,657 1,856
Middle East 1,401 1,825
Australia 280 772
Other 835 450
Total 11,742 4,903
13. Concentrations
At 31 December 2025, four customers represented 92 percent of accounts
receivable, including 52 percent from a single customer. During the year ended
31 December 2025, the Company received 84 percent of its gross revenue from
five customers, including 56 percent from a single customer.
At 31 December 2024, five customers represented 93 percent of accounts
receivable. During the year ended 31 December 2024, the Company received 64
percent of its gross revenue from seven customers.
14. Gain on sale of Saudi Arabia branch assets
On 29 February 2024, the Company sold its Saudi Arabia branch assets,
including equipment and inventory, for an acquisition price of up to $7.125
million (the 'Total Consideration') to Twarid Water Treatment LLC ('Twarid').
The Total Consideration was split $3.125 million paid at closing with up to $4
million deferred on a 24 month earn-out structure based on Twarid achieving
defined revenue targets. The assets sold had a net book value of $2.2 million.
The Company initially recognised a gain of $838,000 from the sale of fixed
assets and operating profit of $100,000 from the sale of inventory. The
Company recognised an additional gain of $1.1 million related to the earn-out
for the period ended 31 December 2024 and $159,000 for January and February
2025. Twarid did not achieve the revenue target in the second year earn-out
period. Therefore, the Company did not recognise any gain for the period March
2025 thru February 2026. The proceeds of the sale enable the Company to focus
on accelerating its marketing and sales plan for its unique technologies while
continuing to grow its proprietary media and product sales in Saudi Arabia
through an exclusive distribution agreement with Twarid.
15. Subsequent Events
The Company discloses material events that occur after the balance sheet date
but before the financials are issued. In general, these events are recognised
in the financial statements if the conditions existed at the date of the
balance sheet but are not recognised if the conditions did not exist at the
balance sheet date. Management has evaluated subsequent events through 6 May
2026, the date the financial statements were available to be issued, and no
events have occurred which require further disclosure.
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. END FR UPUPGAUPQGBQ
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